Chi­nese FDI into Canada slow­ing down

China Daily (Canada) - - FRONT PAGE - By NA LI in Toronto re­nali@chi­nadai­lyusa.com

Chi­nese for­eign di­rect in­vest­ment (FDI) into Canada has de­creased over the past year, said Paul Fer­ley, as­sis­tant chief econ­o­mist at the Royal Bank of Canada (RBC), the largest bank in Canada.

Fer­ley spoke on Wed­nes­day at a brief­ing on the out­look for the US and Cana­dian economies, and the im­pact of China, with a group of Chi­nese-Cana­dian me­dia rep­re­sen­ta­tives and real es­tate pro­fes­sion­als.

“Over the past five years, Chi­nese for­eign di­rect in­vest­ment flows into Canada have in­creased by over $10 bil­lion,” said Fer­ley. “We are now see­ing a soft­en­ing of that, with a slight de­crease from this time last years.”

While Chi­nese FDI into Canada has lev­eled off in dol­lar terms, Cana­dian FDI into China con­tin­ues to rise, Fer­ley said.

Fer­ley also ad­dressed Canada’s soar­ing hous­ing mar­ket, es­pe­cially for­eign own­er­ship of newly con­structed con­do­mini­ums in Toronto and Van­cou­ver, which have risen by 7.4 per­cent and 6 per­cent re­spec­tively since 2010.

Ac­cord­ing to Fer­ley, China is by far Canada’s sec­ond-largest part­ner in bi­lat­eral trade, and is sec­ond only to the US in both im­ports from and ex­ports to China. The vol­ume of trade in­creased in 2015, due to ris­ing Cana­dian im­ports from China.

The top Cana­dian ex­ports to China are re­source-based goods, such as ma­chin­ery and equip­ment. The top Chi­nese ex­ports to Canada are elec­tri­cal prod­ucts and ma­chin­ery and, to a lesser ex­tent, con­sumer goods.

China’s rel­a­tive im­por­tance as a trad­ing part­ner varies sig­nif­i­cantly across the prov­inces, though the largest two- way flow re­mains Bri­tish Columbia.

Re­gard­ing the RMB vs the Cana­dian dol­lar, Fer­ley said that Cana­dian in­ter­est rates are ex­pected to rise slightly in con­trast with a pro­jected cut in China.

The pro­jected change in in­ter­est rates is ex­pected to re­sult in the Chi­nese yuan de­pre­ci­at­ing rel­a­tive to the US dol­lar, while the Cana­dian dol­lar is ex­pected to ap­pre­ci­ate mod­estly next year, which im­plies siz­able de­pre­ci­a­tion of the Chi­nese yuan rel­a­tive to the Cana­dian dol­lar.

Donna O’Reilly, RBC re­gional vi­cepres­i­dent of com­mer­cial bank­ing for

Greater Toronto, said that the spe­cial eco­nomic brief­ing is a way to cel­e­brate the strong eco­nomic and so­cial bonds be­tween Canada and the Chi­nese com­mu­nity.

“Our coun­try is shaped by the more than 1 mil­lion peo­ple of Chi­nese de­scent who have made Canada home over the years,” O’Reilly said. “Whether it’s serv­ing new Cana­di­ans or mem­bers of the com­mu­nity who’ve been here for gen­er­a­tions, we’re hon­oured to have pro­vided fi­nan­cial ad­vice to the Chi­nese-Cana­dian com­mu­nity for al­most 90 years.”

Paul Fer­ley, as­sis­tant chief econ­o­mist of the Royal Bank of Canada

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